Janet Kerr, Vice-Chancellor of Pepperdine University and Professor Emeritus of Law at Pepperdine University School of Law
What was your first corporate board seat appointment and how did that come about?
My first board was Carl’s Jr./Hardee’s. I was teaching corporate law at Pepperdine University law school and there was a student in my class who was the son of the CEO of the company. He wanted to know if I could have lunch with him and his father which I did and it was through that encounter that I eventually received an offer to be on the board. It was my background in corporate governance that was of interest to the company at the time since the Sarbanes-Oxley Act had just been passed and I had been essentially teaching corporate governance for over 20 years.
You have such a unique background for a director. How do you think being an entrepreneur and a law professor helped or hindered your journey to the boardroom?
Being an entrepreneur definitely helped. I founded one of the first-ever centers for entrepreneurship in a law school in 2000 and have also founded and/or developed six technology companies over the last 21 years, ranging in technologies from AR [augmented reality], VR [virtual reality], microelectronics, and data mining and analytics. The last, a data analytics company, sold to Bloomberg BNA. The combination of teaching law and being an entrepreneur mixes both business and law together in a complimentary skill set.
How does your law background inform what you do as a director?
I basically taught corporate governance for 30 years. Teaching law school in the corporate field provided a platform of knowledge in many areas besides governance such as securities regulation, finance, compliance, risk analysis, shareholder activism, ESG [environmental, social, governance], M&A, among others. My business background added a realistic respective — real-life experience in being in the trenches and creating value to businesses while still having an eye on legal ramifications.
What do you think corporate leaders can learn from startups when it comes to strategic planning?
Every business no matter what size has started as a start-up. It’s essential for boards and management to study those companies that have gone from a successful start-up to a successful lasting business, identifying key core values and strategies that have made these companies great businesses. Elasticity and continued innovation are extremely important when companies go beyond the start-up stage.
Does having worked for the SEC given you a perspective that’s different from other directors?
Yes, working for the SEC gave me a boots-on-the-ground perspective on how the agency functions and its perspective on key areas of compliance. Definitely helpful where there are policy and enforcement issues that may affect the business.
You’ve served on corporate boards for a few years now, do you believe boardrooms are finally becoming more diverse? Why do you think progress has been so slow?
I’ve now been on six boards through the years and I’m definitely seeing more diversity. Diversity, however, should not only encompass gender diversity but also ethnic, racial, age and experiential diversity. The push towards diversity is coming from various groups, such as proxy advisers, institutional investors, stakeholders, interest groups, state legislation, among others. I think the mindset by many boards has been, or may still be, towards putting a high priority on finding sitting CEOs or retired CEOs. This frankly can be a rather small group at any point in time and cannot realistically supply the needed push for diversity candidates. There is a need to go broader and deeper.
Does having female voices in the boardroom change the dynamic?
There have been numerous well-known studies such as from Catalyst showing women on boards are value-added in numerous areas such as in financial performance. Diversity in general, not just gender-based, naturally adds different perspectives and hopefully promotes robust discussions in the boardroom.
What advice would you give someone who is looking to join a board?
Due diligence, due diligence, due diligence. Read the company’s public filings on Edgar, read analyst reports about the company, interview high-level management (definitely the CEO and CFO), and talk to each board member. Also find out the status of the company’s D&O insurance and litigation and its compliance history. Ask how the company is dealing with cybersecurity and data privacy issues. Also, what is the company’s culture and core-values. Finally, will there be an atmosphere that is compatible for robust board discussion?
Are there key topics in the boardroom today you find you’re spending a lot of time addressing? Is ESG a big focus?
Big issues are ESG, corporate culture, prevention of workplace sexual harassment, data privacy, cybersecurity, how to attract and retain great employees, board diversity, compensation metrics that drive performance, among others.